Organizing Paperwork

Small business owners can skip the extensive paperwork that comes with applying for a small business loan and opt for an easier, faster method of business financing – the business cash advance.

Government officials recently announced plans of providing SBA loans with stronger government backing. “It’s eliminating fees on its most popular loans, known as 7a loans, and guaranteeing a larger portion of the amount borrowed. It’s also eliminating fees on what are called CDC/504 loans,” writes Associated Press writer, Joyce M. Rosenberg.

This could make it easier than it has been for small business owners to get bank business loans, but is the work that goes into getting a business loan too much?

There are other options for small business owners, such as the business cash advance, which allows merchants to secure up to $500,000 for their businesses in as little as two weeks. Sure, there is paperwork and documentation required when applying for a business cash advance, but not nearly as much as it seems is necessary to secure a business loan.

Business Week’s Smart Answers columnist, Karen E. Klein, emphasizes the importance of business owners’ gathering of documents in order to show the bank that their credibility is good. In fact, when asking for a loan, small business owners should bring “last year’s tax returns, the prior year’s financial statements, the most current financial statement that they have for their business, the owner’s tax return, and the owner’s personal financial statement,” said Mark Dreher, CPA and partner in accounting firm, Wallace, Plese and Dreher, LLP, during his interview with Klein.

Dreher says small business owners should go into the bank with a business plan for the current year prepared. He says they should also have plans B & C prepared. In addition, he expresses the significance of creating a “13 week rolling cash flow,” a report that is updated weekly, which anticipates the cash that comes in and goes out of the business.

Though some of these practices may be good for all small business owners, even those that are not looking into getting a business loan, some small business owners may consider it inconvenient to search for and gather paperwork and personal financial statements from years past, just to get money for their businesses. Moreover, small business owners who want fast cash may find these things to be very time consuming.

For these small business owners, the business cash advance may be a better option. Business cash advance providers typically, only require applicants to submit the last four months of their businesses’ merchant statements, a voided check, driver’s license copy and a two-page application. There is no business plan required and the funds can be used however the borrower chooses.

Having access to business cash is extremely important, but it is more important that small business owners are aware of the many business-financing options that are available to them. As bank-lending standards loosen in the future, the business cash advance will continue to be an easy and convenient method of business financing.

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